In the financial industry, a payee can refer to an individual or entity that is to receive payment from another individual or entity (i.e., the payor). The payor can initiate the payment through a paper check, an electronic transfer, over the telephone, or by any other method known to those in the financial industry. For example, a first payor may utilize an electronic transfer to provide a payment to a cable company payee for cable services. Similarly, a second payor may use a debit card to purchase a product from a department store payee. Unfortunately, there are many instances in which payees utilize fraudulent techniques to receive funds to which they are not entitled.
Fraudulent transactions can result in a loss of funds for an innocent payor and/or a financial institution such as a bank. As an example, a payor may use a network browser to locate a network (such as the Internet) based store which purports to sell electronic goods. Unbeknownst to the payor, the network based store may be a fake store which attempts to fraudulently accept payment for goods with no intent of ever delivering the goods to the payor. The payor can locate a good bargain on an electronic item within the network based store and use his/her bank issued debit card to pay for the electronic item over the network. The bank, which is also unaware that the store is a fake, can transfer funds from the payor's account to the fraudulent payee. As a result, the bank, the payor, or both have lost funds. There are numerous other examples of fraudulent financial transactions in which a fraudulent payee is able to receive undeserved funds.
Unfortunately, traditional fraud detection and prevention systems are not able to efficiently and effectively identify fraudulent acts on the part of payees. While disparate information regarding fraudulent acts of payees may exist, traditional systems are not able to organize and utilize the information to prevent future fraudulent acts from the same payee. Thus, there is a need for a fraud detection system which is able to utilize a plurality of sources to effectively identify fraudulent payees. Further, there is a need for a fraud prevention system which is able to effectively identify and deny financial transactions involving fraudulent payees.